At present, the Employees’ Provident Fund Organisation (EPFO) rules state that only the employees receiving a basic monthly salary of ₹15,000 or less will be receiving PF and pension contributions. The government in 2025 is planning to increase this limit to ₹25,000–₹30,000, thereby making more mid-income employees liable for compulsory coverage. This is a measure to make the social security net wider and thus the retirement savings and long-term financial security would be enhanced.
Beneficiary Category
The broadened salary threshold will now cover those employees who had hitherto been excluded for earning more. Workers in the private sector, employees of MSMEs and service sector professionals earning between ₹15,000 and ₹30,000 will be depositing their dues in EPF and joining Employees’ Pension Scheme (EPS) as well. This can gradually lead to those workers having a larger corpus in the provident fund and consequently receiving bigger pensions, thus, making their post-retirement financial situation better.
Effects on Contributions and Corpus
The new ceiling will have the basis salary range for both employee and employer contributions (normally 12% of basic pay) increased. The EPS part will also become larger reflecting in the enlarged pensions. A single full-career worker might draw substantially higher retirement income through this process, particularly the mid-level ones who had earlier little or no access to the compulsory pension benefits.
Present Status of Proposal
Currently, increasing the salary ceiling is still a matter for discussion and Pln government has not made a concrete announcement and the existing ₹15,000 limit is still in effect. The consultations with the stakeholders are in process to find a balance between the welfare of the worker and the compliance with the costs imposed on the employer. After that, it will be necessary to make adjustments in the payroll systems to cater for the increased contribution amounts.
What Employees Should Do
Employees receiving close to or more than ₹15,000 should be aware of the latest developments from EPFO and the Ministry of Labour. Though larger deductions may somewhat lower the monthly in-hand amount, they will, nevertheless, eventually result in more substantial retirement benefits. It is imperative to keep precise records of wages and PF contributions to guarantee the correct amounts of pension and withdrawal when the new limit comes into force.
Long-Term Benefits
The suggested hike not only secures more employees financially but also guarantees broad financial security to the majority of workers. The government through such inclusion of middle-income workers under the EPF/EPS system not only allots larger corpus and better pension but also strengthens the social security system. Minor adjustments over a period of decades can have an enormous positive impact on the retirement lifestyle of the elderly.
Also Read: EPS-95 Pension Boost 2025: RS 7,500 Minimum Pension Restores Retiree Dignity
